Paige Simpson is a Senior at the University of Kansas School of Business pursuing a Bachelor’s of Science in Supply Chain Management degree, with a minor in Entrepreneurship. Currently, she is the Head Writing Coach at the KU School of Business Communication Center, as well as a teaching assistance for three additional courses.
Data. How can companies use data to promote not just any customer experience, but the ultimate customer experience?
In 2018, 63% of US senior business decision-makers listed big data/analytics as the “most important emerging technology for enhancing customer experience.”
Turning Challenges into Opportunities: Acknowledging and Overcoming Difficulties Regarding Data Integration
Using data for the promotion of the customer experience poses challenges.
Forbes reported that over 70% of users “don’t trust retailers with their data.”
A company that has a successful customer relationship management (CRM) department typically acquires information by giving customers a tangible benefit in exchange of their data. This practice is problematic because of the fact that gathering data while simultaneously creating positive customer sentiment in relation to data-acquisition is time-consuming.
Big data and concerns over company data usage are an obstacle for companies today. Companies must invest time to understand how gathered data can improve the customer experience, as that is key to maintaining a strong customer base.
Improper usage of data can have adverse and counterproductive effects in both customer retention and customer satisfaction rates.
A survey by Experian revealed that 45% of customers would “walk away from a company that contacted them via a channel the customer indicated they did not wish to be contacted.”
3 Ways Companies Can Use Data to Enhance the Customer Experience
1. Personalize Customer Interaction
Amazon excels at the art of using customer data to enhance their customers experience through personalization. According to Investopedia, Amazon uses a filtering engine to personally recommend additional products to the customer depending on what their purchasing habits are. This also pertains to Amazon Video’s personalized viewing suggestions, catered to the individual subscriber.
Netflix is another company who has properly leveraged customer data to their advantage. Like Amazon Prime Video, Netflix has also enjoyed massive success when using customer data. Netflix subscribers, including myself, love that the company “matches” the user with shows and movies they may enjoy.
According to Netflix, “over 75% of viewer activity is based-off personalized recommendations”.
Suggested recommendations work effectively to continually re-engage a company’s customer base. Amazon and Netflix are clear examples of how investing in analyzing consumer data can double down on revenues and, ultimately, the customer experience.
2. Rapidly Resolve Customer Disputes
In 2015, customers were willing to wait 13 minutes for relevant information from a customer service center. Today, ClickZ reports that over two-thirds of customers are not even willing to wait two minutes for problem resolution.
This data has transformed how companies handle problem-resolution. To ensure rapid response time to consumer concerns, companies like Zappos and American Airlines have rapidly adjusted how they train their employees to respond to customer issues. Both companies train their employees to freely address customer concerns how they see fit. This means that American Airlines flight attendants are empowered to autonomously resolve issues by, for instance, give out complimentary miles “on the spot”. Likewise, Zappos offers its customers “free exchanges, expedited shipping, or gifts” to ensure problem resolution and reduce the amount of complaints filed.
3. Captivate Your Target Market
Market Business News wrote that data collection can help companies determine their target audience. This is imperative to the success of any business due to the fact that knowing such valuable information enables companies to properly reach prospective customers and encourage them to purchase their products and/or services. This aides in digital marketing campaigns, as it requires data to make better-informed and strategic decisions.
Marketers are like storytellers, their job is to captivate their audience. If a company can use data to understand their customers’ buying habits, they can ensure that they can meet their needs.
Marketers must know and use customer data to be successful storytellers. Once their target audience is captivated, companies will have increased their customer retention rates while building positive brand image.
Successfully organizing unstructured data can promote quicker restocking rates, along with many other benefits that lead to a better customer experience. Sophisticated supply chains, for instance, use data for forecasting, transportation, and inventory management.
Utilizing customer data is the most fit tool in increasing the satisfaction associated with the customer experience. Managing high-quality data enables a company to make strategic decisions to build competitive advantage. Analyzing and using data to promote the customer experience is a win-win for both the customer and the company harvesting the data. This is the way of the future.
At the end of the day, if a company isn’t analyzing insights from customer data to truly get to know their customers, their competitors will.